Posted by Ajay Kelkar on Sun, Jan 22, 2012
Traditional analytics is changing & has the power to bring in reams of Social data! But for that to happen the Analytics professional has to change & move from the familiar transactional data to newer pastures! Social analytics is sexy but it needs to integrate with the rest of the customer data to make business impact happen!
Seventy-eight percent of Analytics professionals surveyed by Forrester said that they “collect customer feedback or listen” to social media. But far fewer integrate that data. Forrester calls this Social Intelligence — “the management and analysis of customer data from social sources, used to activate and recalibrate marketing programs”.
This is definitely not easy in a corporate setting where often- Customer Care is looked after by a Customer Service department, Social listening is done by PR or corporate communications, analytics by a centralized Business Intelligence unit & Market Research and Advertising is a part of traditional Marketing. And to top it all, Call centres that offer companies daily opportunities to create meaningful connections with customers are run completely independently without leveraging all the social intelligence that is getting created.
Is it possible to tear down these Silo walls? Companies remain trapped by passively collecting social data but not using it effectively. Few actually integrate Business data with Social Intelligence. Only such integration will help drive marketing and business strategy using the data that social media creates. Today, companies underutilize social data and often leave it sitting in its own silo.
Forrester makes an important point: “Today, most organizations remain trapped in listening mode, passively collecting customers’ online conversations and focusing on the qualitative side of social media”. How many companies actually use this Social listening to create new product & service opportunities or even “consumer insights” that are used to impact business.
Can Analytics professionals play a wider role in their companies by bringing in Social data? Here are some ideas:
- Enrich social history of Existing customers: This can give you tonnes of insight, if you could reach into their social personas! Companies should consider the simple way of acquiring social data by simply asking customers to include Twitter handles and other social identifiers when they are registering for a product or service. Harte-Hanks works with Hyundai on its Facebook presence and created a fascinating consumer application. By inviting Facebook fans to play with its application — in exchange for their basic social profile information — Hyundai was able to collect and match customer information with its existing database.
- Integrating customer databases with Social insight: Unique identifiers, most often the customer’s email address, allow Analytics teams to match records in their customer database to online conversations. This approach does have privacy concerns but has proven effective for many brands. Through data-as-a-service companies, such as Fliptop, Full Contact, or Rapleaf, Analytics teams can export their databases and append records with social profile information for customers who used the same email address in each registration.
- Focus on creating the single-customer view: For years Marketers have spoken about this “holy grail”. But here is some insight that shows just how imperative this is: CustomerThink, an online community, recently completed a survey of U.S. consumers and found that 80% had experienced what it calls “touchpoint amnesia,” a term that refers to that experience when a returning customer calls a company with a problem and is treated like they’ve never been heard of before. Of that 80% from the survey, 50% said they were less likely to recommend the company and between 24% and 35% were less likely to actually make a purchase because of it.
Posted by Ajay Kelkar on Sun, Jan 08, 2012
Digital is a “A different way of Marketing”. Instead of thinking about "digital" as the online channel marketers should think of "digital" as the way modern consumers seek knowledge about brands & consume them!. According to me, thinking “one to one” & thinking mass marketing is fundamentally different! You have to fundamentally alter your mass market thinking for Digital to be a powerful paradigm for your brand!
And digital can actually power a lot of “One to one” conversations. So why don't Loyalty marketers talk about this? Often I see marketers referring to typical mass marketing paradigms while analysing their digital success. So a Tata Docomo or a Shoppers stop may say they have 5 million or 2 million Facebook fans! But how are they connecting these numbers to advocacy, influence & commerce!
Instead, analytics can help draw insights derived from the users' actions in digital channels (like search patterns and conversations on social networks) that allows the marketer to build more solid loyalty. Advocacy & influence are huge changes that social media is bringing in & marketers can leverage these! Especially in categories like Automobile & Consumer electronics-Advocacy & influence would be critical drivers!
eMarketer ran a very interesting story, “What Do Facebook Users Expect from Brands?” that speaks out loudly about social media impact on Loyalty programs. The article examined an ExactTarget study and “found that 58% of US Facebook users expect to gain access to exclusive content, events or sales after ‘liking’ a company, while 58% also expect to receive discounts or promotions.”
Also “Liking” a company meant different things to different people. How should marketers make that huge jump from focussing only on how many “Likes” their brand gets towards moving towards advocacy, influence & commerce!
Here are some thoughts:
-
Can I expect to connect with a fashion savvy Customer care associate of a Fashion retailer & seek his advice as I weave fashion into my life! Would a retailer formally allow their associates to build up such a customer relationship!
-
Can I use digital to personalize my interactions with customers?
-
An example is Target, which with the MyTargetWeekly Facebook application provides its fans a customized shopping experience with in-store deals that fit their wants and needs through a recommendation system that gets “smarter” as they use it.
-
Another example is US retailer Tory Burch as a company using a private website with its loyalty data. The loyalty program provides online access to a secure area of its website for its better customers, where it shows designs that could be put into production.
-
Loyalty points as a method of building loyalty is myopic & in fact a lazy marketer’s dream! Given them points & they will come back is an absolute myth! And yet we see a flurry of Coalition program driving into India-all of them trying to build on the “Points” formula! Where is the innovation in the Loyalty space!!
Posted by Ajay Kelkar on Tue, Dec 27, 2011
A few days back,The Reserve Bank of India removed the ceiling of Rs. 50,000 per customer per day mandated in 2009 under the guidelines on mobile banking. Banks are now free to place per transaction limits based on their own risk perception with the approval of its Board.
India has 700 million+ mobile subscribers, just 240 million individuals with bank accounts, 20 million credit cards, 88,000 bank branches, and 70,000 ATMs. Of the households without a bank account, 42 percent have at least one mobile phone. Mobile banking could be a game changer. Today, India already has 149 million mobile data users, approximately 60 million 3G handsets and a broadband penetration of only one percent. According to Informate Mobile Intelligence, three out of four current GPRS users in the country would like to use 3G services in the future and close to 63 percent of mobile users in the 25-30 age group are “very likely” to use it in near future.
However, just five percent of mobile phone subscribers are registered for the service and of them, a tiny 0.5 percent use it regularly, according to the Business Standard financial daily, quoting industry estimates. It is estimated that 680,000 transactions worth Rs 61 Crore rupees (US$13.55 million) are conducted every month.
In 2010-11, the number of transactions through mobile channels grew 300% to 9.6 million from 2.32 million in 2009-10. The value grew to Rs780 crore in 2010-11 as against Rs190 crore in the previous year.
A study by IMRB and IAMAI suggests that there are only about 2 million users accessing Internet through their mobile phones and other mobile devices on an active basis, which means they use Internet on their Mobile at least once a month. As per the study, 27% mobile phones are Internet ready (127 million mobile subscribers out of 471 million total subscribers) and out of these 127 million subscribers, only 12 million have used Mobile Internet. And this number further reduces down to 2 million or 17% when it comes to active users
Some points to consider:
- Should banks be considering mobile banking as an independent product strategy? Isn’t it far more important to have a digital leg for every Retail product? In fact banks must look at the mobile device as an extension of a bank’s multichannel delivery strategy. The idea is to look at Mobile & Internet in a context far larger than pure Cost reductions, rather see these digital channels as game changers!
- How can banks utilize the value of mobility to reach new customer segments? Given the compelling younger consumer demographic in India, can the Mobile be a significant route to get traction amongst younger consumers.
- Analytics can play an interesting role here to find technology savvy consumers amongst the bank’s consumer franchise! Customers leave behind footprints of data that potentially can be mined to be able to slot customers into distinct segments. Segmenting the bank’s customer base to identify “digital consumers” is important & then bank’s must follow through with a whole range of initiatives that allow these customers to engage differently with the bank.
Posted by Ajay Kelkar on Sun, Dec 11, 2011
FMCG companies can use the data produced by Retailers very effectively. Organized Retail is still small in terms of sales contribution for most FMCG’s companies in India. But this will change over time & it would be interesting to see how Retailers & FMCG companies develop their relationships! Western countries have adopted these partnerships, calling them Efficient Consumer Response initiatives (ECR).
It’s amazing; P&G was always the bully till the early 1980’s. It used the enormous consumer data that it obtained through market research to bully retailers! Then retailer’s developed sophisticated Point of sale systems & began to bully P&G right back. Wall mart was of course the gorilla of the pack.
And yet surprisingly, in the mid 1980’s, this adversarial relationship between the two gorillas began to change! Cut to the present & Robert McDonald is the P&G CEO & a man on a mission: to make Procter & Gamble the most technologically enabled business in the world. To get there, the 31-year company veteran and former US Army captain is overseeing the large-scale application of digital technology and advanced analytics across every aspect of P&G’s operations and activities.
Here is what he says: “It would be heretical in this company to say that data are more valuable than a brand, but it’s the data sources that help create the brand and keep it dynamic. So those data sources are incredibly important. Therefore, we go to the extreme to protect whatever consumer data we get. It’s a board-level enterprise risk-management issue for us”
Hearing this from P&G is truly heretical-can data rival Brand equity in the P&G world!I wrote about this earlier. How companies store, transform & use their data will become as potent a marketing tool as Brand equity itself! Companies have huge amounts of data now and there is technology & skill sets available to decode it. If used powerfully enough, data about a customer can transform the customer experience!
http://blog.hansacequity.com/customer-management-blog/bid/41348/data-equity-will-rival-brand-equity-in-the-days-to-come
Here is another comment from Robert McDonald about P&G’s data partnerships: “For companies like ours that rely on external data partners, getting the data becomes part of the currency for the relationship. When we do joint business planning with retailers, for example, we have a scorecard, and the algorithm is all about value creation. Getting data becomes a big part of the value for us, and it’s a big part of how we work together. We have analytic capabilities that many retailers don’t have, so often we can use the data to help them decide how to merchandise or market their business in a positive way”.
P&G’s Gillette unit, for example, claims to have mined Wal-Mart data to develop promotions that increased sales as much as 19 percent. More than seventeen thousand suppliers are given access to their products’ Wal-Mart performance across metrics that include daily sales, shipments, returns, purchase orders, invoices, claims and forecasts. And these suppliers collectively interrogate Wal-Mart data warehouses to the tune of twenty-one million queries a year.
In India, the first meeting on ECR took place on 10 December, 1999. The attendees included representatives from J&J, Nestle and erstwhile FoodWorld & PwC. But I wonder how this initiative has developed or are we in the stage where FMCG companies are the bullies in the neighbourhood !!
I would love to hear your views about this!
Posted by Ajay Kelkar on Sun, Nov 27, 2011
When do you decide that you don't love your customer anymore! Is he costing you too much to keep! I had written earlier about this & had spoken about the interesting philosphy that Royal bank of Canada(RBC) has. Essentially RBC believes that "there are no unprofitable customers, only lazy marketers who are not ready to formulate a product or service that meets their needs"
Of course it is far easier to "fire your customers" in a rapidly growing market like India where replacement is easier to find! I know of a private sector bank which constantly used to "weed out customers" as a strategy to drive profitability!
Analytics can help you find profitable customers & set up a marketing program that can help "change behaviour" to help you achieve customer profitability. This is so different from waiting till your customer has churned & then building models that predict churn!
Here is an interesting article from Knowledge@Wharton on this issue:
Posted by Ajay Kelkar on Fri, Oct 21, 2011
What's sexy about Analytics -the insight or the decision? Different industries seem to think differently!
Who values Analytics more? Some industries seem to believe in the power of analytics & actually base decisions on it. A bank decides whether to give a loan or not basis an Application score card or a credit card company spots a fraudulent activity basis analytics & stops the card usage.
A lot of other industries use Analytics for insight generation but are they as good as the Banking & Financial services industry (BFSI) in linking the analytics to action.
But do analytics professionals care about the decision or are they happy just doing the sexy “insight” oriented stuff!
I have had experience now across sectors & I see some critical differences.
- BFSI has developed processes around analytics & has mastered the art of bringing an algorithm close to the point of decision making. Banks & NBFC’s can use data to take effective decisions about whom to lend to & what interest rate to charge.
- In comparison, for many industries Analytics is still the appetizer, it helps you think & get insights but the decisions get taken without an algorithm. That is not to say that you need an analytical algorithm to take every decision but I am sure it can help.
- Now imagine if we could pioneer this for other industries like Fast moving consumer goods(FMCG), DTH or Retail or even Auto. As a part of my work at Cequity, we have often done this. But it takes effort to build the processes around it. Imagine if an FMCG company had a Marketing mix simulator basis which they took decisions on their marketing investments basis what analytics throws up as effective!
- After all Analytics should help in “Making decisions”!! And wherever one does this, the interesting thing is how the Data & technology expertise is combined with Analytics & effective engagement vehicles (Call centres, Mobile apps, websites) to make this happen.
Posted by Ajay Kelkar on Sat, Sep 24, 2011
I read this wonderful article by Srividya Sridharan of Forrester. Here is her comment:
“Analytics and creativity are seldom used in the same sentence. The natural instinct is to delineate the two as left-brain and right-brain pursuits. Analytics and creative teams speak different languages, use different tools, and find inspiration in different places. Customer Intelligence (CI) professionals are usually closer to the world of analytics. They capture, manage, analyze, and apply heaps of customer data using advanced analytical tools and techniques. But in order for them to step out of a perceived geeky image, CI professionals should think about how to add a dash of creativity into their roles”
I do believe that creativity is critical for analytics to take shape in an organization. Here is the link to her article: http://bit.ly/pUOHkQ
I see it as critical at 3 stages:
1. Building the analysis/model/scorecard-at this stage the need is for creativity about imagining customer behavior. The more creatively one imagines behavior the more impact it will have on the analyst's hypothesis & therefore the derived variables that she creates.
2. In this stage Creativity is about how she should present & visualize her findings. For years advertising agencies have found really creative ways of presenting their "Central ideas". Analysts need to learn from that & make compelling presentations. This almost needs the equivalent of having "Phd's with a personality" in your analyst team!!
3. And finally Analytics folk need to be creative about bringing the result of their analytics closer to the decision making process. The more creatively you embed analytics into the customer path, the more you will see impact!
So creativity is critical, but in my view in multiple dimensions! Strangely here is another thought from Forrester:
This also reminds me about how radically views can change over time. I really liked this Forrester chart which almost predicted the death of creativity & the rise of Left brain rational thinking.
Maybe the “death of the right brain” was a bit exaggerated!
I would love to hear your views about this!!
Posted by Ajay Kelkar on Sun, Sep 11, 2011
It is interesting to see the Mobile phone services in India beginning their journey to increase profit per customer! During the last two years, profits and revenues of Indian telecom companies have suffered from a bruising price war that has cut call tariffs to less than one US cent a minute.
But looking at profits per customer does not come easily to most companies. Banks have done it well & so have some casino companies-Royal Bank of Canada & Harrah’s Casino come to mind here!
Also the solution does not lie in “firing some of your customers”. Here is a lovely comment from the Vice Chairman, Royal Bank of Canada:
“There is no such thing as an unprofitable customer. If we can’t make money on the client, then it’s not the client’s fault – we have to change something in the way we operate. We can either charge the customer more, because we have not got the price right or we need to take our costs down or we need to stop selling the product to them and find something more suitable to their need. We try to match up the package to the client so that they are only paying for what they need” Jim Rager, Vice Chairman ,RBC Financial Group
I have seen a Bank in India, practice this strategy very effectively. Here are some observations:
- Start with a simple model of customer profitability or Customer value segmentation. Have different segments of customers; band them from least profitable to most profitable. Analytics can help here but try to keep measurement principles simple.
- Keep the measurement consistent –it need not be the most advanced analytic technique but important to hold it consistently over a 3 year period at least!
- Ensure you link management action to it. Look at why a customer is in the low profitability segment-if it is a bank, ask if the customer is doing too many cash transactions or has not been sold another product. This analysis can lead to clear management action.
- Review customer profitability metrics aggressively. Wouldn’t it be nice if you had a customer level P&L, too much to ask for?
Posted by Ajay Kelkar on Sat, Aug 27, 2011
Earlier, in financial services, classical channel push was the only way of marketing. Today companies have a huge amount of “data” that customers leave behind in their transactional systems. This data is like “footprints” that customers are leaving behind! And along with this there are Lifestage events that are impacting teh customer every single day!
So a customer changing his address needs to notify his bank. That’s a data footprint! Most address changes would be an upgrade in lifestyle& could be an opportunity to sell a personal loan or mortgage to the customer. The data is there but the marketer has to see it & act in it. A customer getting a sudden inflow of funds in her account or making her first international trip are also examples of “data footprints” that the bank captures & needs to leverage better!
These events allow banks to stop treating their customers as segments! Customers want to be treated as individuals not “segments” & event triggers allow you to do just that!
Another important advantage of event-based marketing is the opportunity that it creates to open the door into a stronger, deeper, better relationship with customers. Actually, event-based marketing tends to change the whole nature of the sales force that has been used to push a product through only glib sales talk. The sales persons in this case now assumes the role of a relationship manager, as sales pitch is not necessary, with the offering of a relevant product at the right time to the customer. The opportunity that is now created is of a stronger bond. This may even call for a separate sales team with a different mindset, who look at the long-term value of the customer rather than an immediate sale, to support the event-based campaigns conducted by marketers.
In a nutshell, event-based marketing uses data about incidents in a customer’s life pertaining to the industry, to offer relevant products at the right time to the right customers. This leads to the opportunity for deeper and long-term relationships with customers, while changing the traditional role of sales people from sellers to relationship managers.
I have written about this in a earlier post-take a look at that too:
http://bit.ly/cQWlfl
Posted by Ajay Kelkar on Sun, Aug 21, 2011
How companies store, transform & use their data will become as potent a marketing tool as Brand equity itself! Companies have huge amounts of data now and there is technology & skill sets available to decode it.
If used powerfully enough, data about a customer can transform the customer experience! When a bank calls you just when you have made that “high value, jewellery” purchase on your credit card, is an example of data driving a customer experience. You are immediately relived that your bank will be alert if your card gets into the wrong hands!
A recent RBI report caught my attention “RBI tells banks to automate Reporting”. Worried by the eroding profitability in some banks, RBI is trying to reduce any errors in reporting because of human intervention. This tends to happen because for proper reporting, banks have to pull out data from multiple “source systems”. The system for credit cards would be different than that for liabilities etc. Banks are not unique in facing this problem; many other industries today capture huge amounts of data & struggle to bring it all together!
Volumes of data from internal and external information systems are deluging many organizations. Hidden amidst all this data are the clues that we need to define the organization’s strategic position and retain competitive advantage.
In the midst of this upheaval, technology presents the concept of data warehousing as one way to handle information overload. Data warehousing has many different meanings, but it is basically a process that involves the physical separation of an organization’s production operations from its decision support operations.
The problem with datawarehouses is that they cost one hell of a lot of money! To build & to operate! And in business things keep changing so they cost another truckload of money to adapt to those changes!
Here are some real life issues that one can face as you go down the road to build a datawarehouse:
- Who owns the datawarehouse? Is this a Marketing owned effort or is at an enterprise investment? Whose budget are we using?
- Wouldn’t it take forever? Should we continue “business as usual” on the side while we wait “forever” for the datawarehouse to happen?
- How do we understand what IT wants to say? We need to think about the company ’ s IT infrastructure not as technology to process data, as we have in the past, but as strategic resource for making better decisions
- How do we select the correct technology? Too many choices to select from Teradata, IBM or Microsoft etc!
- Articulate what analytics based decisions you want your datawarehouse to help you take?